Paul Krugman

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  • Economists And Experts Hammer Trump's Plan To Increase Military Spending At Expense Of Nearly Everything Else

    Blog ››› ››› ALEX MORASH & CRAIG HARRINGTON

    President Donald Trump’s plan to beef up the defense budget by an additional $54 billion at the expense of civilian domestic spending, which he will unveil tonight before a joint session of Congress, has been derided by economists and experts for being "wholly unrealistic" and “voodoo” economics.

    Bloomberg reported on February 26, that Trump’s first budget proposal would call for a $54 billion -- more than 9 percent -- increase in defense spending to be paid for with reductions to discretionary domestic spending, which Sen. Chuck Schumer (D-NY) described as the budgetary equivalent of taking “a meat ax to programs that benefit the middle-class.” White House press secretary Sean Spicer confirmed reports of the president’s budget priorities in a February 27 press briefing, adding that Trump would discuss his budget plan in more detail during his February 28 address to Congress.

    Economists and experts have hammered Trump for months for proposing dramatic and seemingly unnecessary increases in defense spending. An October 19 article in New York magazine described Trump’s promises of new defense expenditures as “a random grab bag of military goodies, untethered to any coherent argument” because he lacked any vision or purpose for increasing funding to the military. According to figures compiled by the Peter G. Peterson Foundation, American defense spending already eclipses the military spending of the next seven countries combined:

    The reception for Trump’s new budget outline has been similarly harsh. New York Times columnist and Nobel Prize-winning economist Paul Krugman derided the president’s claim that a “revved up economy” could fund new tax cuts and spending increases as “deep voodoo” -- alluding to Trump’s embrace of trickle-down economics. Washington Post contributor and Center on Budget and Policy Priorities (CBPP) senior fellow Jared Bernstein slammed Trump’s “wholly unrealistic” budget outline in a February 28 column and chided the president for claiming that he can simultaneously increase military spending, cut taxes on high-income earners and corporations, and reduce the federal deficit -- all while leaving vital entitlement programs alone. In order to even approach a balanced budget in 10 years, Trump would have to remove almost everything else in the budget:

    According to a February 27 analysis from the CBPP, Trump's proposal, when coupled with his plan to boost infrastructure investments, would mean nondefense spending would see a whopping 15 percent reduction. The reason for the outsized hit to nondefense discretionary spending is that the programs covered by that part of the federal budget -- education, energy, affordable housing, infrastructure investments, law enforcement, foreign aid, some veterans' benefits, etc. -- only account for a small part of all federal spending. The largest part of the federal budget is mandatory spending for entitlement programs including Social Security, Medicare, Medicaid, other veterans's benefits, and unemployment insurance. From the Congressional Budget Office:

    Trump’s proposed cuts to the State Department are so onerous that more than 120 retired generals signed an open letter to congressional leaders warning of their ramifications. One co-signer told CBS News that such steep cuts would be “consigning us to a generational war,” and the letter itself quoted Secretary of Defense James Mattis, who argued during his time at the head of U.S. Central Command that “if you don’t fully fund the State Department, then I need to buy more ammunition.”

    ThinkProgress blasted Trump’s proposals to cut the State Department along with domestic spending in the name of increasing national defense because such cuts would actually undermine national security. The article cited recent congressional testimony from Center for American Progress senior fellow Larry Korb, who testified that “our national security will suffer” if the federal budget prioritized the Pentagon at the expense of other agencies.

    Trump is notorious for pushing bogus claims about the economy and the federal budget. He has been derided by hundreds of economists for pushing right-wing myths about the economy and the federal debt, and routine criticisms of his unfounded claims were a mainstay of the presidential campaign in 2016. As was the case last year, the budgetary, fiscal, and tax policies Trump has supported since taking office simply don’t add up.

  • First Amendment Watch: December 2016

    ››› ››› ZACHARY PLEAT

    During his 2016 campaign for president, Donald Trump launched an unprecedented war on the press. Since his election, Media Matters has tracked his and his team’s continuing attacks on the media and their abandonment of presidential norms regarding press access, which poses a dangerous threat to our First Amendment freedoms. Following is a list of attacks President-elect Donald Trump made against the media -- and instances in which he demonstrated disregard for the press -- during the month of December 2016.

  • Experts Fear Trump Policies May Cause Economic Slowdown

    ››› ››› ALEX MORASH

    After Donald Trump's election, media and experts are predicting the president-elect’s stated policies will harm the economy if implemented in 2017 and beyond. According to expert analyses, working-class Americans will face the greatest economic disruptions as a result of Trump’s policies.

  • Wrong Again, Steve: Trump Adviser's Paranoia About New York Sick Leave Ordinance "Proven Unfounded"

    Researchers Found New York’s Enactment Of Paid Sick Leave Was “No Big Deal” Despite Right-Wing Media Fear Mongering Around “Very Dangerous” Law

    Blog ››› ››› ALEX MORASH

    The Center for Economic and Policy Research (CEPR) released a report on the economic impact of New York City’s requirement that employers provide workers with paid sick leave, finding that right-wing media concerns that such ordinances would create a prohibitive cost burden were “proven unfounded.” The ordinance was a particular target of the thoroughly discredited pundit Stephen Moore, who now counts himself among Republican presidential nominee Donald Trump’s senior economic advisers despite a consistent track record of being dead wrong on the economy.

    According to a September 6 report from CEPR, fears that New York’s paid sick leave mandate would be “a major cost burden on employers” that could “invite widespread abuse by employees” have “proven unfounded.” The report surveyed 352 randomly selected businesses from October 2015 to March 2016 and found 97 percent of businesses had not reduced worker hours, 94 percent had not raised prices, and 91 percent had not reduced hiring activity as a result of the city’s paid sick leave mandate. The report also found that 96 percent of businesses reported no changes in customer service, and 94 percent reported no changes in productivity as a result of the law, which CEPR described as “a ‘non-event’ for most employers” despite the fact that the measure extended paid sick days to 1.4 million workers. The CEPR report on the successful implementation of paid sick leave in New York comes just two weeks after researchers with the National Bureau of Economic Research (NBER) found that paid sick leave laws like New York’s may prevent the spread of illnesses such as the flu and significantly improve public health.

    Slate reported on CEPR's findings on September 7, mocking conservative critics of the law who worried it would create, as Slate put it, “a labor force of hypochondriac slackers” and drive businesses out of the city. Slate noted that paid sick leave laws had been passed in five states, Washington, D.C., and 26 cities since San Francisco enacted a paid leave mandate in 2007, calling the development “one of American progressives’ greatest policy triumphs.” Slate also noted that New York should be a good testing ground for how paid sick leave can affect economic growth, due to the city’s large size and the similar results found elsewhere by the U.S. Department of Labor. From Slate:

    Did a labor force of hypochondriac slackers cause businesses to relocate to Nassau and Westchester Counties? It doesn’t look like it: New York City’s share of metropolitan employment has actually increased, slightly, in the two years since the revised law took effect.

    [...]

    That jibes with findings from other cities published by the U.S. Department of Labor in October. San Francisco has outperformed surrounding counties in job growth since the passage of its policy in 2007. Likewise, analyses of Seattle and Washington, D.C. found negligible impacts on hiring and business location. A ton of research has also shown that flexible leave policies have a positive effect on worker productivity, happiness, and health.

    These findings -- and the report that New York has seen the best job creation in a half-century during Mayor Bill De Blasio’s first two years in office -- offer a stark rebuke to critics of paid leave mandates like Trump economic adviser Stephen Moore. During a January 17, 2014, appearance on Fox News, Moore, who was then a Wall Street Journal editorial board member, blasted New York’s paid sick leave mandate, falsely claiming it would be “very dangerous for cities” if more such laws were enacted.

    Moore’s empty criticism echoed other right-wing pundits, who had attacked paid leave as an unwarranted “entitlement” and hyped the supposed costs to businesses while ignoring the benefits for workers. Right-wing media repeatedly push such myths and routinely dismiss the need for such laws as nothing more than part of a “giant welfare giveaway utopia.” The complete failure of this particular right-wing media myth in the face of actual evidence bolsters Nobel Prize-winning economist Paul Krugman’s claim that Moore “has a troubled relationship with the facts.” Krugman speculated that in the conservative economic policy climate where Moore has made his career, perhaps his “incompetence is actually desirable” -- after all, a “smart hack might turn honest.”

  • WSJ Claims Clinton Penalizing Tax-Dodging Corporations Is Akin To “Class Warfare”

    Editorial Board Calls For “Trumpian Pragmatism” On Corporate Taxes Even Though Journal’s Own Reporting Shows Experts Prefer Clinton On The Economy

    Blog ››› ››› ALEX MORASH

    The Wall Street Journal blasted Democratic presidential nominee Hillary Clinton’s plan to assess a tax on corporations that move overseas as “familiar class-warfare artillery” and claimed that what these supposedly overburdened American multinational corporations really deserve is "Trumpian pragmatism" in the form of massive tax cuts. The editorial, which promoted a number of discredited and misleading talking points to advocate for corporate tax cuts, was published just hours before the Journal reported on a survey of over 400 economists showing an overwhelming expert preference for Clinton’s economic policies.

    In an August 21 editorial, the Journal attacked Clinton’s push to rein in corporate tax avoidance schemes as a means of “class warfare” and “the sort of thing banana republics impose when their economies sour.” Clinton’s plan would be to levy an “exit tax” on corporations that engage in a process called “tax inversion,” wherein an American multinational corporation acquires a foreign company and claims its taxable profits are now based outside the United States. Rather than imposing a tax on companies that try to skirt federal law -- and using the revenue to invest in critical infrastructure projects, as Clinton has suggested -- the Journal advocated for what it called “Trumpian Pragmatism”: slashing the corporate tax rate by more than half as a way to “deter inversions” and convince companies to relocate in the United States. From the August 21 edition of The Wall Street Journal:

    The Democrat would impose what she calls an “exit tax” on businesses that relocate outside the U.S., which is the sort of thing banana republics impose when their economies sour. She’d conduct a census and then categorize any multinational with more than 50% U.S. ownership as a domestic concern that would be subject to a tax on its deferred profits if it inverts. She isn’t specifying the punitive tax rate.

    [...]

    Mr. Trump proposes to cut the U.S. corporate rate to 15% from 35% (or 40% counting average state rates). Fifteen percent is low enough to deter inversions while making the country more attractive to capital investment and better primed for higher wages. He would also offer a preferential rate of 10% for the $2 trillion already earned overseas.

    Mrs. Clinton calls this tax-cutting for billionaires and corporate-jet owners, which shows how unhappy her Presidency could be. Such Trumpian pragmatism—10% of $2 trillion is better than 35% of $0—is the only realistic way for Mrs. Clinton to fund her infrastructure plan, and Republicans in Congress have sounded out Democrats for such a deal for years. President Obama has rebuffed their entreaties, settling for nothing—and now Mrs. Clinton is setting herself up for the same.

    Despite the editorial board’s claims against Clinton, reporter Ben Leubsdorf actually reported in the Journal’s Real Time Economics blog on August 22 that business economists overwhelmingly prefer Clinton as the best candidate on the economy. According to a recent survey by the National Association for Business Economics (NABE) that Leubsdorf cites, 55 percent of the 414 economists surveyed believed Clinton “would do the best job of managing the economy” compared to just 14 percent who picked Republican nominee Donald Trump. (Trump registered less support in the survey than did Libertarian nominee Gary Johnson, who garnered 15 percent.)

    An independent economic analysis of Clinton’s plan from Moody’s Analytics found it would boost job creation by roughly 10 million jobs over four years -- over 3 million more jobs than would be gained by maintaining current economic policies. When Moody’s ran the same analysis of Trump’s tax plan, which the candidate has since revised, it found that his proposals were likely to stymie economic growth and job creation while increasing the debt and deficit, largely for the benefit of “very high-income households” like his own.

    When CNNMoney correspondent Cristina Alesci and CNN analyst Ali Velshi compared Clinton's economic plan to Trump’s on the August 17 edition of CNN's Legal View with Ashleigh Banfield, Alesci noted that Clinton's plan would largely benefit the middle class while Velshi reported that the lack of details in Trump's economic plan makes it "unclear ... who it actually helps and who it doesn't." Velshi added that experts believe parts of Trump's plan, including the child care tax deduction, are "designed for higher-income, more affluent families."

    Trump’s tax plan would sharply reduce corporate tax rates from 35 percent to 15 percent and create three individual income tax brackets of 12, 25, and 33 percent. The Trump plan has been lambasted by economists as “nonsense,” and media fact-checkers ridiculed its “pathetic” lack of details. Nobel Prize-winning economist and New York Times columnist Paul Krugman slammed Trump for promoting more of the “standard voodoo” economics frequently pushed by Republican supply-side advocates. Economic policy professor and former Secretary of Labor Robert Reich blasted Trump and his economic advisor Stephen Moore for attempting to rebrand the “sheer lunacy” in Trump’s original tax plan into the “normal nonsense of supply-side, trickle-down economics.”

    For its part, The Wall Street Journal is no stranger to pushing discredited “trickle-down” tax cuts, so the editorial board’s decision to embrace Trump’s implausible platform in the face of overwhelming evidence is no surprise.

  • A Comprehensive Guide To Benghazi Myths And Facts

    ››› ››› BRENNAN SUEN & OLIVIA KITTEL

    After nearly four years of right-wing myths about the September 2012 attack on an American diplomatic compound and CIA compound in Benghazi, Libya, and as Republicans and Democrats on the House Select Committee on the attacks release their reports, Media Matters has compiled a list of more than 50 myths and facts regarding the origin of the attack, the security surrounding the compounds, the Obama administration’s handling of the attack during and after its occurrence, attacks on then-Secretary of State Hillary Clinton, and other lies and misinformation regarding the Benghazi attack.

  • An Extensive Guide To The Fact Checks, Debunks, And Criticisms Of Trump’s Various Problematic Policy Proposals

    ››› ››› TYLER CHERRY & JARED HOLT

    Over the course of the 2016 presidential primary, presumptive Republican presidential nominee Donald Trump has laid forth a series of problematic policy proposals and statements -- ranging from his plan to ban Muslims from entering the United States to his suggestion that the United States default on debt -- that media have warned to be “dangerous,” “fact-free,” “unconstitutional,” “contradictory,” “racist,” and “xenophobic.” Media Matters compiled an extensive list of Trump’s widely panned policy plans thus far along with the debunks and criticism from media figures, experts and fact-checkers that go along with them.

  • What Media Need To Know About Trump Economic Policy Advisers Steve Moore And Larry Kudlow

    ››› ››› CRAIG HARRINGTON & ALEX MORASH

    Politico reported that Donald Trump is tapping conservative economic pundits Stephen Moore and Larry Kudlow to assist in remaking the presumptive Republican nominee’s tax plan, which has been lambasted as a budget-busting giveaway to high-income earners and corporations. Media should be aware that both Moore and Kudlow have long histories of playing fast and loose with the facts while making outlandish and incorrect claims about the economy.

  • Media Slam Trump’s “Insane” Plan To Default On U.S. Debt

    Analysts Explain That Real Estate Gimmicks Don’t Work For The American Economy

    ››› ››› CRAIG HARRINGTON & ALEX MORASH

    During a lengthy phone interview with CNBC, presumptive Republican nominee Donald Trump outlined a plan to partially default on the United States’ outstanding sovereign debt obligations in hopes of eventually negotiating lower rates of repayment. The tactic is common in the types of commercial real estate dealings Trump is familiar with, but journalists and financial analysts stressed that employing such a strategy with American debt would undermine global financial stability and potentially drive the American economy into a deep recession.

  • New York Times' Paul Krugman Calls Out Conservatives' "Bizarre Reaction" To Terror Attacks

    Krugman: "The Same People Now Hyping The Terrorist Danger" Of Syrian Refugees In Right-Wing Media Also Hyped The "Greatly Exaggerated" Ebola Scare Of 2014

    Blog ››› ››› MEDIA MATTERS STAFF

    The New York Times' Paul Krugman called out right-wing media's baseless anxiety about Syrian refugees and "exaggerated" panic over the threat of a terrorist attack as the latest example of the "apocalyptic mind-set that has developed among Republicans during the Obama years."

    In a November 20 column, Krugman observed that Fox News contributor Erick Erickson's "bizarre" threat not to "see the new 'Star Wars' movie on opening day, because 'there are no metal detectors at American theaters'" is "part of a larger pattern" of right-wing panic.

    Right-wing media reacted to the November 13 ISIS-led attacks on Paris and elsewhere with sweeping and unfounded claims that President Obama's anti-terror response is endangering U.S national security, with some on Fox even claiming that he has "Islamic sympathies." Others vilified Syrian refugees and defended calls for religious litmus tests, only accepting Christian refugees, on the basis that "Muslims might blow us up."

    Krugman noted that among conservatives "[t]hese days, panic attacks after something bad happens are the rule rather than the exception." He attributed this epidemic to the "apocalyptic mind-set that has developed among Republicans during the Obama years": "Think about it. From the day Mr. Obama took office, his political foes have warned about imminent catastrophe. Fiscal crisis! Hyperinflation! Economic collapse, brought on by the scourge of health insurance!" Krugman recalled right-wing media's "great Ebola scare of 2014," which featured assertions that President Obama would expose American troops to Ebola to "atone for colonialism." While the "threat of pandemic, like the threat of a terrorist attack, was real," he wrote, "it was greatly exaggerated, thanks in large part to hype from the same people now hyping the terrorist danger." All of this overblown fearmongering is, Krugman concludes, "what the right is all about:

    Erick Erickson, the editor in chief of the website RedState.com, is a serious power in right-wing circles. Speechifying at RedState's annual gathering is a rite of passage for aspiring Republican politicians, and Mr. Erickson made headlines this year when he disinvited Donald Trump from the festivities.

    So it's worth paying attention to what Mr. Erickson says. And as you might guess, he doesn't think highly of President Obama's antiterrorism policies.

    Still, his response to the attack in Paris was a bit startling. The French themselves are making a point of staying calm, indeed of going out to cafesto show that they refuse to be intimidated. But Mr. Erickson declared on his website that he won't be going to see the new "Star Wars" movie on opening day, because "there are no metal detectors at American theaters."

    It's a bizarre reaction -- but when you think about it, it's part of a larger pattern. These days, panic attacks after something bad happens are the rule rather than the exception, at least on one side of the political divide.

    [...]

    But we shouldn't really be surprised, because we've seen this movie before (unless we were too scared to go to the theater). Remember the great Ebola scare of 2014? The threat of a pandemic, like the threat of a terrorist attack, was real. But it was greatly exaggerated, thanks in large part to hype from the same people now hyping the terrorist danger.

    What's more, the supposed "solutions" were similar, too, in their combination of cruelty and stupidity. Does anyone remember Mr. Trump declaring that "the plague will start and spread" in America unless we immediately stopped all plane flights from infected countries? Or the fact that Mitt Romney took a similar position? As it turned out, public health officials knew what they were doing, and Ebola quickly came under control -- but it's unlikely that anyone on the right learned from the experience.

    What explains the modern right's propensity for panic? Part of it, no doubt, is the familiar point that many bullies are also cowards. But I think it's also linked to the apocalyptic mind-set that has developed among Republicans during the Obama years.

    Think about it. From the day Mr. Obama took office, his political foes have warned about imminent catastrophe. Fiscal crisis! Hyperinflation! Economic collapse, brought on by the scourge of health insurance! And nobody on the right dares point out the failure of the promised disasters to materialize, or suggest a more nuanced approach.

    [...]

    The context also explains why Beltway insiders were so foolish when they imagined that the Paris attacks would deflate Donald Trump's candidacy, that Republican voters would turn to establishment candidates who are serious about national security. Who, exactly, are these serious candidates? And why would the establishment, which has spent years encouraging the base to indulge its fears and reject nuance, now expect that base to understand the difference between tough talk and actual effectiveness?

  • A "Laughable Crusade": Media Call Out The "Political Fakery" Of The Benghazi Committee

    ››› ››› ALEX KAPLAN

    Media figures and editorial boards are calling out the "political fakery" of the House Select Committee on Benghazi, criticizing it as a "laughable crusade" against Clinton rather than a legitimate investigation into the Benghazi attacks, after two congressmen and an ex-committee staffer admitted to the partisan nature of the committee.

  • New York Times' Paul Krugman Calls Out The Media For Failing To Acknowledge The "Political Fakery" Of The Benghazi Investigation

    Blog ››› ››› RACHEL CALVERT

    The New York Times' Paul Krugman called out the media's fraudulent coverage of the Benghazi committee and Hillary Clinton's email use, for treating the non-scandals as "real debates about national security or economics even when it's both obvious and easy to show that nothing of the kind is actually taking place." 

    In an October 9 column, Krugman observed that House Majority Leader Kevin McCarthy "inadvertently did the nation a big favor with his ill-advised honesty" when he bragged about the Benghazi committee's success in "inflicting political damage on Hillary Clinton," exposing how the Fox News manufactured Benghazi hearings "had nothing to do with national security."

    Krugman called out media figures who cover topics such as the Benghazi hearings and Clinton's use of email for pretending "that we're having real debates about national security or economics even when it's both obvious and easy to show that nothing of the kind is actually taking place," calling it a "kind of fraudulence": 

    So Representative Kevin McCarthy, who was supposed to succeed John Boehner as speaker of the House, won't be pursuing the job after all. He would have faced a rough ride both winning the post and handling it under the best of circumstances, thanks to the doomsday caucus -- the fairly large bloc of Republicans demanding that the party cut off funds to Planned Parenthood, or kill Obamacare, or anyway damage something liberals like, by shutting down the government and forcing it into default.

    Still, he finished off his chances by admitting -- boasting, actually -- that the endless House hearings on Benghazi had nothing to do with national security, that they were all about inflicting political damage on Hillary Clinton.

    But we all knew that, didn't we?

    I often wonder about commentators who write about things like those hearings as if there were some real issue involved, who keep going on about the Clinton email controversy as if all these months of scrutiny had produced any evidence of wrongdoing, as opposed to sloppiness.

    Surely they have to know better, whether they admit it to themselves or not. And surely the long history of Clinton nonscandals and retracted allegations -- remember, there never was anything to the Whitewater accusations -- should serve as a cautionary tale.

    Somehow, though, politicians who pretend to be concerned about issues, but are obviously just milking those issues for political gain, keep getting a free pass. And it's not just a Clinton story.

    [...]

    Again, none of this should come as news to anyone who follows politics and policy even moderately closely. But I'm not sure that normal people, who have jobs to do and families to raise, are getting the message. After all, who will tell them?

    Sometimes I have the impression that many people in the media consider it uncouth to acknowledge, even to themselves, the fraudulence of much political posturing. The done thing, it seems, is to pretend that we're having real debates about national security or economics even when it's both obvious and easy to show that nothing of the kind is actually taking place. 

    But turning our eyes away from political fakery, pretending that we're having a serious discussion when we aren't, is itself a kind of fraudulence. Mr. McCarthy inadvertently did the nation a big favor with his ill-advised honesty, but telling the public what's really going on shouldn't depend on politicians with loose lips.